The carrying amount of ten cars used by Bayo Limited on January 1, 2017, was N12,000,000 and the accumulated depreciation was N3,200,000. On January 2, 2017, the entity bought a new car costing N2,000,000. The dealer accepted a car owned by the entity in part exchange at a value of N160,000. The car originally cost N1,200,000 and its accumulated depreciation was N1,080,000.

i. Calculate the gain or loss on disposal of the old car. (4 Marks)

ii. Show how the purchase of the new car and the disposal of the old car will be recorded in the ledger accounts of Bayo Limited. (8 Marks)